Global, U.S Economy Strength Could Chew Through Grain Supplies

There’s been conflicting reports about the dollar’s strength coming from the White House.

Last month, Treasury Secretary Steve Mnuchin said a weaker dollar would benefit the U.S. more than a stronger dollar would.

“Obviously a weaker dollar is good for us as it relates to trade and opportunities,” he said in Davos, Switzerland.

One day after the remarks, President Trump contradicted Mnuchen, saying the dollar needs to gain strength to be successful.

“Ultimately I want to see a strong dollar,” he said.

The weaker dollar has been trading weaker, which stimulates exports. According to Jim McCormick, senior trading advisor with Allendale, Inc., this has been showing up especially in the corn and cattle markets.

“The rest of the world’s economies are going strong and our dollar is a bit weaker,” he said. “That should drive demand for our products, which is going to be the key to get rid of this surplus grain.”

All around the world, he said, the economies have been “hitting on all cylinders.”

Hear McCormick’s thoughts on the state of the economy and what it could mean for agriculture on AgDay above.